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Market Matters Blog           04/23 11:57
Canadian Pacific Weekend Strike Postponed; U.S. Rivers Still Rising
DDG Prices Slightly Higher
First Tow, First Saltie of 2018 Shipping Season Arrive in Minnesota
DDG Prices Continue to Move Higher
Brazil's Bull Rally in Soybeans
Concerns Over Rail Service, Charges Lead STB to Address Class 1 Railroads
DDG Prices Higher Again
A Recap of Tariff Warnings
Logistic Issues, Higher Corn Market Pushes DDG Higher
Planting Intentions: Will Farmers Stick to Same Rotation as 2017?

******************************************************************************
Canadian Pacific Weekend Strike Postponed; U.S. Rivers Still Rising

   Rail shippers in Canada and the U.S. could be heard breathing a sigh of 
relief late Friday evening after the CP announced it had come to what may be 
just a temporary agreement with the two unions that had planned to strike April 
21. If that strike occurs, it will disrupt rail movement in and out of Canada 
and the western U.S. because they rely on service from the CP. 

   The CP announced April 20, "This evening, we reached an agreement with both 
the Teamsters Canada Rail Conference-Train & Engine (TCRC) and the 
International Brotherhood of Electrical Workers (IBEW), which averts the 
potential work stoppage of 12:01 a.m. ET tomorrow, April 21, 2018. As such, 
CP's embargoes for shipments routing to and from CP Canadian locations has been 
cancelled effective immediately. CP will immediately begin to execute a safe 
and structured start-up of its train operations in Canada."

   However, it does not appear that a strike is completely off the table. The 
Minister of Labor directed the Canadian Industrial Relations Board to 
administer a ratification vote on each of the company's final offers to members 
of the Teamsters Canada Rail Conference (Teamsters) and the IBEW, according to 
the CP.

   According to CBC Canada, Teamsters Canada President Doug Finnson said in a 
statement, "CP succeeded in delaying the inevitable. The government will bring 
this ridiculous offer to our members and we strongly recommend that members 
vote against it. I would like to reassure our members that we have given 
nothing up."

   The Teamsters and the IBEW only agreed to postpone a strike until after the 
vote, but Finnson said, "CP has exhausted all of its possibilities and will 
have to eventually face its workers." Finnson described CP as victims "of their 
own aggressive behavior," with the union charging that Teamsters had filed 
thousands of contract violations grievances and multiple unfair labor practice 
complaints against its employer, according to CBC.

   Until the unions vote and accept an offer by the CP, the threat of a strike 
is still imminent. Stay tuned.

   MISSISSIPPI RIVER AND TRIBUTARIES STILL FLOODING

   Since the end of February, commerce on the Mississippi, Illinois and Ohio 
rivers has been hampered by high water. Heavy rains and snow melt caused 
massive flooding and while there has been some relief, flood warnings have now 
been issued again for parts of the Ohio River at Cairo, Illinois, and the 
Mississippi River at Vicksburg, Mississippi, and all the way in to the Gulf.

   Tom Russell, Russell Marine Group told DTN that, "High water safety 
protocols on the Ohio River and Lower Mississippi River from Cairo to New 
Orleans have been in place since March. As long as extreme rain events do not 
occur, the current forecasts indicate water levels will fall sufficiently to 
lift safety protocols sometime during the second half of May."

   On April 22, The NWS issued a flood warning, saying it continues for the 
Ohio River at Cairo until April 29. At 10 p.m. Sunday, the stage was 43.2 feet. 
Flood Stage is 42 feet. The Forecast is for the river to continue rising to 
near 44.9 feet by early April 27 morning. The river will fall below flood stage 
early April 29.

   Russell said that high water and safety protocols that mandate tow size 
reductions, daylight-only operations and extra tug power remaining in fleets 
have severely stressed the system from St. Louis to New Orleans. "Barge transit 
times from St. Louis to New Orleans have increased by additional five-to-seven 
days. Barge rates spiked due to lack of turn-around time."

   By midweek, barge freight rates did back off, mainly for the next week 
forward, although bids on the nearby were 25% lower versus Monday. A barge line 
noted that the lack of any grain moving was one of the reasons shippers have 
lowered bids. However, by the end of the week, some shippers did buy offers 
that were posted for the rest of April and interest started to pick up for May. 

   Basis along the river was stronger in many spots by April 20, thanks in part 
to cheaper freight, but empties are still slow to return northbound out of the 
Gulf. CIF NOLA bids remained firm, as logistics in the Baton Rouge and New 
Orleans harbors remain backed up and extremely congested. This has been the 
case for more than six weeks. According to the NWS, the flooding will continue 
for at least the next few weeks. 

   On April 21, the NWS issued a continuing flood warning for the Mississippi 
River at Baton Rouge until May 8. NWS said at 9 p.m. Sunday the stage was 37.3 
feet. Flood stage is 35 feet. The forecast is for the river to continue to fall 
to below flood stage by Tuesday afternoon. The impact  is at 36.0 feet, river 
traffic and industrial activity on the river side of the levees will be greatly 
affected. Navigational safety regulations will be strictly enforced. Meanwhile, 
the impact at 35 feet is river islands from Red River Landing downstream to 
Baton Rouge will be inundated.

   Russell said that, "In port, barge deliveries to grain terminals now take 
four to six days. Ships are slow to load due to the conditions and incidents of 
high-water related accidents. Anchorage space has been reduced due to high 
water. An oil spill two weeks ago in New Orleans closed the river for a few 
days. That stoppage caused port gridlock that pilots are still trying to work 
through. Arriving ships are being held off SWP (southwest pass) for one or two 
days, waiting for available anchorage space."

   Farther north, at the head of the Upper Mississippi River corridor in St. 
Paul, Minnesota, the river is expected to rise to 14.3 feet (minor flood stage 
is 14 feet) by April 29. So far, major flooding (17 feet) is not expected, but 
the Twin Cities just experienced their largest April snowfall on record, and 
for the entire month of April as of the 18th, they received 26.1 inches, 
breaking the previous record of 21.8 inches in 1983. Also, since the start of 
2018 the Twin Cities broke another snowfall record, receiving 70.3 inches as of 
April 18.

   As long as the snowmelt remains on a slow pace and no heavy rains show up in 
the next few weeks, we should be in good shape in St. Paul. However, as the 
river fills up in St. Paul, it has to move south, which will only add to the 
already high water still present in the Lower Mississippi River to the Gulf.

   Here's a link to the NWS for all U.S. flood gauges: 
https://water.weather.gov/ahps/forecasts.php

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow Mary Kennedy on Twitter @MaryCKenn

******************************************************************************
DDG Prices Slightly Higher

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
39 locations DTN contacted was $167 per ton for the week ended April 19, up $1 
per ton versus a week ago. A few merchandisers did say the market does feel 
like it wants to move lower heading in to May. That will all depend on supply 
availability and feeder demand as we head to warmer temperatures.

   The Energy Information Administration (EIA) reported that ethanol plant 
production continued lower, dropping 25,000 barrels per day (bpd) to 1.009 
million bpd during the week ended April 13. DDG bids were higher in the plants 
where supplies have been tightened by either spring maintenance or slower 
production.

   Based on the average of bids collected by DTN, the value of DDG relative to 
corn for the week ended April 19 was at 122.40%, and the value of DDG relative 
to soybean meal was at 44.73%. The cost per unit of protein for DDG was $6.19, 
compared to the cost per unit of protein for soybean meal at $7.86. Even with 
soymeal prices weaker this week, DDG still remains the best value per unit of 
protein.

   The U.S. Grains Council (USGC) noted in its weekly market price update that, 
"Barge CIF NOLA prices fell this week while FOB NOLA prices decreased as well. 
Logistics issues across the Midwest sent rail-delivered PNW prices $3/metric 
tons (MT) higher and FOB Lethbridge, Alberta values $12/MT higher. Prices for 
product CIF Southeast Asia were steady/higher, rising $2/MT on average. Prices 
for shipments to Taiwan led the way with $4/MT gains, while product for the 
Philippines and Malaysia rose $3/MT." 


ALL PRICES SUBJECT TO CONFIRMATION       CURRENT     PREVIOUS CHANGE
                                                      4/12/
COMPANY   STATE                         4/19/2018      2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri         Dry             $175        $170     $5
                           Modified        $90         $85      $5
CHS, Minneapolis, MN (800-769-1066)
          Illinois         Dry             $175        $175     $0
          Indiana          Dry             $170        $170     $0
          Iowa             Dry             $170        $170     $0
          Michigan         Dry             $180        $175     $5
          Minnesota        Dry             $165        $165     $0
          North Dakota     Dry             $170        $170     $0
          New York         Dry             $175        $175     $0
          South Dakota     Dry             $165        $165     $0
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas           Dry             $163        $160     $3
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana          Dry             $170        $170     $0
          Iowa             Dry             $160        $155     $5
          Michigan         Dry             $170        $170     $0
          Minnesota        Dry             $165        $160     $5
          Missouri         Dry             $180        $180     $0
          Ohio             Dry             $170        $170     $0
          South Dakota     Dry             $155        $155     $0
    `            `
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas           Dry             $168        $163     $5
                           Wet             $55         $55      $0
          Illinois         Dry             $175        $172     $3
          Nebraska         Dry             $168        $163     $5
                           Wet             $55         $55      $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois         Dry             $175        $175     $0
          Indiana          Dry             $175        $175     $0
          Iowa             Dry             $160        $160     $0
          Michigan         Dry             $170        $170     $0
          Minnesota        Dry             $155        $155     $0
          Nebraska         Dry             $165        $165     $0
          New York         Dry             $180        $180     $0
          North Dakota     Dry             $170        $170     $0
          Ohio             Dry             $170        $170     $0
          South Dakota     Dry             $155        $155     $0
          Wisconsin        Dry             $160        $160     $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
          Indiana          Dry             $170        $170     $0
          Iowa             Dry             $155        $155     $0
          Minnesota        Dry             $160        $160     $0
          Nebraska         Dry             $170        $170     $0
          Ohio             Dry             $170        $170     $0
          South Dakota     Dry             $165        $165     $0
          California                       $235        $235     $0
Western Milling, Goshen, California (559-302-1074)
          California       Dry             $238        $236     $2
*Prices listed per ton.
          Weekly Average                   $167        $166     $1
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

               VALUE OF DDG VS. CORN & SOYBEAN MEAL
                            Settlement Price:      Quote Date                  Bushel     Short Ton
                                         Corn             4/19/2018           $3.8200           $136.43
                                 Soybean Meal             4/19/2018                             $373.30
                DDG Weekly Average Spot Price                                                   $167.00
                       DDG Value Relative to:                             4/19              4/12
                                                                              122.40%           119.56%
                                 Soybean Meal                                  44.73%            43.29%
                    Cost Per Unit of Protein:
                                          DDG                                   $6.19             $6.15
                                 Soybean Meal                                   $7.86             $8.07
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn

******************************************************************************
First Tow, First Saltie of 2018 Shipping Season Arrive in Minnesota

   Spring has yet to arrive in Minnesota. This past weekend, Minnesota broke a 
snowfall record for April, with over 13 to 25 inches falling from the Twin 
Cities to the southern part of the state. Minnesota farmers have yet to get in 
their fields, meaning they have planted zero crops. The Minnesota Twins 
canceled four of their first 10 home games because of snow, Minnesota High 
Schools have shortened their spring sports seasons and not a single one of 
Minnesota's 10,000 Lakes have yet to declare "ice out."

   Finally, on April 11, after cutting through ice on Lake Pepin, the Motor 
Vessel Michael Poindexter, pushing 12 barges, locked through Lock and Dam 2, 
near Hastings, Minnesota, on its way to St. Paul. The St. Paul District 
maintains a 9-foot navigation channel and operates 12 locks and dams to support 
navigation from Minneapolis to Guttenberg, Iowa.

   This was the latest start to the shipping season in the UMR not related to 
flooding. The USACE noted that the earliest date for an up-bound tow to reach 
Lock and Dam 2 was March 4 in 1983, 1984 and 2000. The average start date of 
the navigation season is March 22. The latest arrival date unrelated to 
flooding was April 8, 2013. Historic flooding in 2001 delayed the arrival of 
the first tow until May 11.

   Farther north, up in Duluth, the first saltie (oceangoing ship) of the 2018 
commercial navigation season, the Federal Weser, arrived in the Port of 
Duluth-Superior late on on April 12. Here is a video of the ship arriving in 
the dark, heading under the Duluth aerial lift bridge: 
https://www.youtube.com/watch?v=P5fmtimSpQY. 

   According to a press release by the Duluth Port Authority, the Federal Weser 
was expected to start loading 21,400 metric tons of durum wheat bound for 
Algeria April 16 in the morning at the CHS terminal on the Superior side of the 
harbor. If all goes according to plan, departure could be late April 17 or 
April 18.

   "Some of the world's highest-quality grains move from farmers' fields in 
Minnesota and North Dakota through the Port of Duluth-Superior to customers in 
countries across Europe, North Africa and points beyond," said Kate Ferguson, 
director of business development for the Duluth Seaway Port Authority. "When it 
comes to shipping everything from agricultural products and iron ore to heavy 
equipment and project cargoes, the Port of Duluth-Superior literally links the 
heartland of North America to the world."                                       
        

   The Federal Weser is the first of a half-dozen salties that will make their 
way to the Twin Ports via the Great Lakes St. Lawrence Seaway System during the 
next couple of weeks.

   Meanwhile, as Minnesota digs out of another weekend snowstorm, those of us 
who live here have concluded that our official seasons of 2018 are: winter, 
summer, fall, winter. Spring will not make an appearance this year.

   Mary Kennedy can be reached at mary.kennedy@dtn.com   

   Follow Mary Kennedy on Twitter @MaryCKenn

******************************************************************************
DDG Prices Continue to Move Higher

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
39 locations where DTN collected bids was $166 per ton for the week ended April 
12, up $4 per ton versus a week ago. 

   The domestic and export markets continue to strengthen due to tight supplies 
and strong demand. The EIA noted that ethanol plant production fell 4,000 
barrels per day (bpd) on the week to 1.034 million bpd during the week ended 
April 6. 

   A merchandiser told me that the price strength may continue as supplies 
could get tighter with some plants heading in to spring maintenance.

   Based on the average of bids collected by DTN, the value of DDG relative to 
corn for the week ended April 12 was at 119.56%, and the value of DDG relative 
to soybean meal was at 43.29%. The cost per unit of protein for DDG was $6.15, 
compared to the cost per unit of protein for soybean meal at $8.07, keeping DDG 
competitively priced in feed rations. 

   The U.S. Grains Council (USGC) noted in its weekly market price update that, 
"On the export market, FOB NOLA DDGS are $10/metric ton (mt) higher and valued 
at 136% of FOB NOLA corn. The DDGS/corn ratio is at its highest point in at 
least two years as international DDGS demand remains robust. The difference 
between FOB NOLA-Barge CIF NOLA values widened again this week, increasing 
netback to merchandisers with river access, which should keep pulling product 
to the export market. Prices for DDGS CIF Southeast Asia rose $12/mt on average 
this week." 

   The shipping season on the Mississippi River is now 100% open after the 
Motor Vessel Michael Poindexter, pushing 12 barges, locked through Lock and Dam 
2, near Hastings, Minnesota, on its way to St. Paul on Wednesday, April 11, 
after cutting though ice on Lake Pepin. The St. Paul District maintains a 
9-foot navigation channel and operates 12 locks and dams to support navigation 
from Minneapolis, Minnesota to Guttenberg, Iowa. 

   According to the U.S. Army Corps of Engineers, this was the latest start to 
the shipping season in the Upper Mississippi River not related to flooding.


ALL PRICES SUBJECT TO CONFIRMATION              CURRENT        PREVIOUS  CHANGE
COMPANY    STATE                               4/12/2018       4/5/2018
Bartlett and Company, Kansas City, MO (816-753-6300)
           Missouri            Dry                $170           $170      $0
                               Modified           $85            $85       $0
CHS, Minneapolis, MN (800-769-1066)
           Illinois            Dry                $175           $175      $0
           Indiana             Dry                $170           $165      $5
           Iowa                Dry                $170           $160      $10
           Michigan            Dry                $175           $170      $5
           Minnesota           Dry                $165           $160      $5
           North Dakota        Dry                $170           $165      $5
           New York            Dry                $175           $175      $0
           South Dakota        Dry                $165           $160      $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
           Kansas              Dry                $160           $160      $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
           Indiana             Dry                $170           $165      $5
           Iowa                Dry                $155           $150      $5
           Michigan            Dry                $170           $165      $5
           Minnesota           Dry                $160           $150      $10
           Missouri            Dry                $180           $170      $10
           Ohio                Dry                $170           $165      $5
           South Dakota        Dry                $155           $150      $5
    `               `
United BioEnergy, Wichita, KS (316-616-3521)
           Kansas              Dry                $163           $163      $0
                               Wet                $55            $55       $0
           Illinois            Dry                $172           $172      $0
           Nebraska            Dry                $163           $163      $0
                               Wet                $55            $55       $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
           Illinois            Dry                $175           $170      $5
           Indiana             Dry                $175           $170      $5
           Iowa                Dry                $160           $155      $5
           Michigan            Dry                $170           $165      $5
           Minnesota           Dry                $155           $150      $5
           Nebraska            Dry                $165           $160      $5
           New York            Dry                $180           $175      $5
           North Dakota        Dry                $170           $165      $5
           Ohio                Dry                $170           $165      $5
           South Dakota        Dry                $155           $150      $5
           Wisconsin           Dry                $160           $155      $5
Valero Energy Corp, San Antonio Texas      (210-345-3362)     (210-345-3362)
           Indiana             Dry                $170           $167      $3
           Iowa                Dry                $155           $155      $0
           Minnesota           Dry                $160           $155      $5
           Nebraska            Dry                $170           $155      $15
           Ohio                Dry                $170           $165      $5
           South Dakota        Dry                $165           $165      $0
           California                             $235           $225      $10
Western Milling, Goshen, California (559-302-1074)
           California          Dry                $236           $234      $2
*Prices listed per ton.
           Weekly Average                         $166           $162      $4
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and

   **


VALUE OF DDG VS. CORN & SOYBEAN MEAL
Settlement Price:                         Quote Date     Bushel    Short Ton
Corn                                      4/12/2018      $3.8875   $138.84
Soybean Meal                              4/12/2018      $383.40
DDG Weekly Average Spot Price             $166.00
DDG Value Relative to:                                   4/12      4/5
119.56%                                   116.46%
Soybean Meal                                             43.29%    42.23%
Cost Per Unit of Protein:
DDG                                                      $6.15     $6.00
Soybean Meal                                             $8.07     $8.08
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

   Mary Kennedy can be reached at mary.kennedy@dtn.com 

   Follow her on Twitter @MaryCKenn

******************************************************************************
Brazil's Bull Rally in Soybeans

   As USDA reports go, Tuesday's USDA World Agricultural Supply and Demand 
Estimates (WASDE) report was a bit of a sleeper with no major surprises 
revealed. USDA's 550 million bushel estimate of U.S. ending soybean stocks for 
2017-18 seemed a little too bullish to be true, as USDA just showed on March 29 
that U.S. soybean demand was down 6% from a year ago in the first half of 
2017-18. Tuesday's ending stocks estimate means soybean demand will have to be 
up 8% in the second half of the season just to meet USDA's expectations. That 
is a tall order after China just proposed a 25% tariff on U.S. soybeans last 
week.

   As we often point out here at DTN, USDA estimates are one thing and the 
market's own actions are another. But this time around, the two may be closer 
than most suspect, as a variety of soybean prices are showing strong bullish 
behavior in the face of troublesome fundamental concerns.

   The most surprising bullish behavior is coming from Brazil where the FOB 
soybean price traded at $11.83 on Wednesday, just one day after Brazil's 
government agency, CONAB, raised its soybean crop estimate to a record-high 
115.0 million metric tons (4.23 billion bushels). USDA followed with the same 
assessment a few hours later. That $11.83 happens to be the highest such price 
for Brazil since July 2016 and is 43 cents above the FOB price in New Orleans.

   As odd as it is to see a new high price cited along with a record crop 
estimate, USDA's Oilseeds: World Markets and Trade offered some explanation 
Tuesday (https://bit.ly/2hvLUru). USDA reduced its estimate of Brazil's ending 
soybean stocks from an already tight 49 mb (1.325 mmt) to an even tighter 27 mb 
(738,000 mt) for the current 2017-18 local season. In other words, the 
combination of China's insatiable demand and Argentina's drought is squeezing 
nearly every soybean out of Brazil, and the result is an unusual bull market 
rally in Brazil at harvest time.

   If the U.S. and China were more politically at ease, we would normally 
expect China to take advantage of cheaper U.S. prices and buy more soybeans 
from the red, white and blue, but in the current environment, China seems to be 
doing all it can to avoid the U.S. The question may soon become: How big of a 
price difference between the U.S. and Brazil does there have to be for China to 
come back to the U.S. market?

   Since the latest report of weekly U.S. export sales for the week ending 
March 29, USDA has announced 47.5 mb (1.292 mmt) of old-crop soybean sales to 
either China or unknown destinations. Thursday morning's weekly report from 
USDA will show more and promises to be interesting.

   It is possible that China's government already knew the country would soon 
need more soybeans from the U.S. on April 4 when they proposed a 25% tariff on 
U.S. soybeans. It is also fair to wonder if that pressure led China's President 
Xi Jinping to say on April 11 that China would "protect the lawful 
(intellectual property) owned by foreign enterprises in China" ("China's Xi 
announces plans to 'open' China ..." by Everett Rosenfeld and Huileng Tan, 
CNBC.com, April 10, 2018, at https://cnb.cx/2ICkVE3). Protection of 
intellectual property was a key complaint of the U.S., which led to the recent 
spate of increased tariffs, some enacted, but most still proposed.

   In spite of China's reluctance, U.S. soybean prices are also showing bullish 
behavior, especially in the new-crop months when China typically relies on the 
U.S. for soybeans. Wednesday's closing soybean prices showed the November 
contract 7 3/4 cents above the March, a bullish sign of commercial willingness 
to secure new-crop supplies early.

   And commercial firms aren't the only ones interested in securing new-crop 
soybean supplies. On Tuesday and Wednesday, Argentina bought a total of 8.8 
million bushels (240,000 mt) of new-crop soybeans from the U.S. -- rare 
purchases from the world's largest exporter of soybean meal.

   It may be difficult to believe that roughly a week after China's tariff news 
broke, the market for new-crop soybeans is showing this much bullish behavior. 
But as it now stands, the trend in new-crop soybeans is up as the bullish 
evidence is outweighing the market's bearish fears.

   Todd Hultman can be reached at Todd.Hultman@dtn.com

******************************************************************************
Concerns Over Rail Service, Charges Lead STB to Address Class 1 Railroads

   The National Grain and Feed Association (NGFA), with assistance from the 
North American Millers Association (NAMA), alerted the Surface Transportation 
Board (STB) on March 10 of major concerns it had received from rail-service 
customers. These included severe rail service problems and excessive charges 
involving Class I railroads that were experienced by shippers and receivers of 
grains, oilseeds and processed grain products.

   The NGFA noted in its letter that rail customers "continue to be subjected 
to the disparity in which rail carriers unilaterally impose on their customers 
costs and penalties for performance-related issues, with no commensurate 
reciprocal penalties imposed upon carriers when they fail to perform."

   Here is a link to the letter from the NGFA outlining rail service 
degradation issues and imposition of new and escalating accessorial charges: 
https://goo.gl/P1gR4d 

   On March 16, the board responded to the NGFA concerns by sending a letter to 
all U.S. Class I railroads, requesting that they provide their service outlook 
plans in the near term and for the remainder of 2018, "due to increased 
concerns over deteriorating service." The board asked for information about 
each railroad's network, including locomotive availability, employee resources, 
local service performance, service demand, communication strategies and 
capacity constraints.

   In its letter, the STB expressed concern about the overall state of rail 
service based on the weekly data supplied by each Class 1 railroad. The board 
noted that some railroads reported that system average dwell time has 
increased, as well as the average number of cars that have not moved in 48 
hours. The board also requested that each Class 1 railroad address all the 
concerns presented by the NGFA and NAMA.

   BNSF was one of the first railroads to respond, noting in its letter that 
winter weather, including heavy snow and below-zero temperatures, affected 
velocity and fluidity on portions of the company's primary route between the 
Pacific Northwest and the Midwest. BNSF Railway President and CEO Carl Ice 
wrote in his letter that, "BNSF believes the worst of those impacts are behind 
them as the carrier heads into spring."

   Ice pointed out that things have improved of late, noting that total volume 
moved by BNSF marks a historic high for this time of year; BNSF topped 200,000 
units for five straight weeks and eight of the last nine weeks through March 
22. In addition, he said that dwell time dropped by more than 7% annually on a 
year-to-date basis. This was in spite of two trains stranded for multiple days 
under snow and ice on the mainline track section of the Hi-Line Subdivision on 
the Northern Transcon and two simultaneous derailments in February on both the 
Southern Transcon and Northern Hi-Line (Montana).

   In his report to the board on March 30, Canadian Pacific (CP) President and 
CEO Keith Creel said, "Our network has now recovered from the weather 
challenges to such an extent that volumes this month, March, will be our 
highest since March 2015, as measured by revenue ton miles. Overall, volumes to 
date have been in line with our initial forecast. 

   "We have seen stronger volumes than we expected in several areas, in 
particular potash, frac sand, fertilizer and intermodal. We have also seen an 
increase in demand for Canadian crude oil by rail given the development of 
pipeline constraints that have driven price spreads in favor of rail. Service 
challenges on a Canadian competitor railroad have contributed to an unexpected 
shift of business to CP as well," said Creel.

   "With respect to NGFA's concern relative to the late 2017 timeframe, CP 
experienced significant outages on our mainline in Western Canada due to a 
derailment in a mountain tunnel in British Columbia, followed by a series of 
avalanches that took both our line and CN's (Canadian National) line out of 
service in the Fraser River Canyon." 

   Creel did note those outages did not affect U.S. operations directly, but 
did affect velocity and the flow of locomotive power. With regard to NGFA's 
concern with changes in CP's tariff, Creel stated that the changes in CP's 
tariff are reasonable and competitive.

   Here is a link to all the letters received by the STB in response to their 
initial request: https://www.stb.gov/stb/elibrary/NDP_Correspondence.html 

   RAIL SERVICE IN CANADA HAS BEEN A DISASTER

   Despite the commitments made by Canada's two railroads, the CP and CN, to 
improve grain shipping in the Prairies, the path to recovery has been painful 
and slow. "Grain companies have fallen months behind in accepting producers' 
contracted grain, which has negatively affected farm cash flow. Exporters have 
incurred demurrage costs charged by West-Coast vessels. Country elevator space 
is critically tight on the Prairies, while concerns are growing that the 
railroad recovery could push cars into the country at the worst possible time, 
as yards turn muddy with the snowmelt. On top of that, weight restrictions on 
roads are right around the corner with a compressed spring season ahead as 
winter conditions linger into the month of April," said DTN Canadian Grains 
Analyst Cliff Jamieson.

   Jamieson noted that recent data from the Ag Transport Coalition, an industry 
group that is responsible for shipping 90% of prairie grain, shows that the two 
railroads spotted 69% of the empty hoppers ordered for loading across the 
Prairies for week 35 shipping, or the week-ending April 1. "Both railroads 
spotted 69% of the cars requested, a week-over-week improvement for the CP 
while a decline in performance for CN. This is the best-combined performance 
seen in 10 weeks, after the two railways spotted just 32% of the hopper 
requested five weeks ago in week 30," he added.

   "The backlog of cars ordered waiting to be spotted fell by just 89 cars from 
the previous week to 3,460 cars, the smallest number reported in eight weeks 
and has fallen in four of the past five weeks after reaching a reported high of 
5,382 cars in week 30," said Jamieson. 

   Jamieson added, "At the same time, the number of cancelled or rationed cars 
continues to grow. This number increased by 659 cars over the most recent week 
to 21,851 cars. While this number has grown steadily, almost entirely due to CN 
cancellations, week 35 saw the week-over-week increase grow for the first time 
in three weeks. In total, unfulfilled demand is reported at 31,232 cars, or at 
90 metric tons per car, approximately 2.8 million metric tons. It is 
interesting to note that shippers have ordered 298,055 cars in the first 35 
weeks of the crop year, just 56 cars less than the number ordered over the same 
period in 2016/17.

   "Of this unfulfilled demand, performance across shipping corridors varies 
widely. Unfulfilled demand into the USA/Mexico corridor totals 1,544 cars, or 
4.9% of the total, while demand for south-bound cars represents 6.1% of total 
cumulative demand. The elephant in the room is unfulfilled demand to the West 
Coast ports of Vancouver and Prince Rupert, which totals 23,806 cars or 76% of 
the unfulfilled demand, while demand for west-bound movement represents 72% of 
total cumulative demand."

   Jamieson said that implications of the poor service are many, as noted 
above, and will be felt for a long time. "Meanwhile, the federal government's 
Bill C-49, designed to increase competition and increase railroad 
accountability, remains tied up in the political process in Ottawa," concluded 
Jamieson.

   Mary Kennedy can be reached at mary.kennedy@dtn.com   

   Follow Mary Kennedy on Twitter @MaryCKenn 

******************************************************************************
DDG Prices Higher Again

   OMAHA (DTN) -- The average distillers dried grains (DDG) spot price from the 
39 locations where DTN collected bids was $162 for the week ended April 5, up 
$3 versus a week ago. The domestic and export markets remain firm. Prices in 
California rose as supplies are tight in that area. A merchandiser told me that 
demand in California has been very strong and some buyers have been running out 
before every train arrives at destination.

   Based on the average of bids collected by DTN, the value of DDG relative to 
corn for the week ended April 5 was at 116.46%, and the value of DDG relative 
to soybean meal was at 42.23%. The cost per unit of protein for DDG was $6.00, 
compared to the cost per unit of protein for soybean meal at $8.08. The recent 
strength in the soybean meal market has kept DDG a good value on a per unit of 
protein cost.

   The U.S. Grains Council (USGC) noted in its weekly price update that barge 
CIF NOLA values moved $15/metric ton (mt) higher and FOB NOLA prices rose 
$10/mt Prices for DDGS CIF Southeast Asia increased $7/mt to $240/mt. The 
average price increase for product destined for Southeast Asia for April and 
May shipments was $5/mt while prices for June shipments to these destinations 
increased $10/mt.

   The DDGS market, along with other commodities, received troubling news on 
April 2 when China placed "retaliatory" tariffs of a 25% increase on sorghum, 
corn, DDGS, beef and soybeans. In an April 5 news release, U.S. Grains Council 
President and CEO Tom Sleight said, "Despite the challenges we face at the 
moment, never has this been more true: Ninety-five percent of the world's 
consumers now live outside of the United States, increasing prosperity and 
population growth mean more demand for the products we are selling, and the 
United States remains the most innovative and robust agricultural producer in 
the world. 

   "Agricultural exports contribute positively to our trade balance year in and 
year out, and they support millions of manufacturing, transportation and retail 
jobs in the United States while offering more and better food to people in the 
more than 75 countries that buy our coarse grains and co-products each year," 
said Sleight.

   Here is a link to the full USGC statement: 

   
https://grains.org/perspective-u-s-china-tensions-highlight-market-impact-of-tra
de-importance-of-engagement/


ALL PRICES SUBJECT TO CONFIRMATION       CURRENT     PREVIOUS CHANGE
                                                      3/29/
COMPANY   STATE                          4/5/2018      2018
Bartlett and Company, Kansas City, MO (816-753-6300)
          Missouri         Dry             $170        $170     $0
                           Modified        $85         $85      $0
CHS, Minneapolis, MN (800-769-1066)
          Illinois         Dry             $175        $165    $10
          Indiana          Dry             $165        $165     $0
          Iowa             Dry             $160        $155     $5
          Michigan         Dry             $170        $168     $2
          Minnesota        Dry             $160        $155     $5
          North Dakota     Dry             $165        $160     $5
          New York         Dry             $175        $175     $0
          South Dakota     Dry             $160        $155     $5
MGP Ingredients, Atchison, KS (800-255-0302 Ext. 5253)
          Kansas           Dry             $160        $160     $0
POET Nutrition, Sioux Falls, SD (888-327-8799)
          Indiana          Dry             $165        $165     $0
          Iowa             Dry             $150        $150     $0
          Michigan         Dry             $165        $165     $0
          Minnesota        Dry             $150        $150     $0
          Missouri         Dry             $170        $170     $0
          Ohio             Dry             $165        $165     $0
          South Dakota     Dry             $150        $150     $0
    `            `
United BioEnergy, Wichita, KS (316-616-3521)
          Kansas           Dry             $163        $163     $0
                           Wet             $55         $55      $0
          Illinois         Dry             $172        $172     $0
          Nebraska         Dry             $163        $163     $0
                           Wet             $55         $55      $0
U.S. Commodities, Minneapolis, MN (888-293-1640)
          Illinois         Dry             $170        $165     $5
          Indiana          Dry             $170        $165     $5
          Iowa             Dry             $155        $150     $5
          Michigan         Dry             $165        $165     $0
          Minnesota        Dry             $150        $150     $0
          Nebraska         Dry             $160        $155     $5
          New York         Dry             $175        $175     $0
          North Dakota     Dry             $165        $165     $0
          Ohio             Dry             $165        $165     $0
          South Dakota     Dry             $150        $150     $0
          Wisconsin        Dry             $155        $155     $0
Valero Energy Corp, San Antonio Texas (210-345-3362) (210-345-3362)
          Indiana          Dry             $167        $167     $0
          Iowa             Dry             $155        $148     $7
          Minnesota        Dry             $155        $145    $10
          Nebraska         Dry             $155        $150     $5
          Ohio             Dry             $165        $165     $0
          South Dakota     Dry             $165        $147    $18
          California                       $225        $215    $10
Western Milling, Goshen, California (559-302-1074)
          California       Dry             $234        $226     $8
*Prices listed per ton.
          Weekly Average                   $162        $159     $3
The weekly average prices above reflect only those companies DTN
collects spot prices from. States include: Missouri, Iowa, Nebraska,
Kansas, Illinois, Minnesota, North Dakota, South Dakota, Michigan,
Wisconsin and Indiana. Prices for Pennsylvania, New York and
California are not included in the averages.

             VALUE OF DDG VS. CORN & SOYBEAN MEAL
               Settlement Price: Quote Date   Bushel Short Ton
                            Corn    4/5/2018 $3.8950   $139.11
                    Soybean Meal    4/5/2018 $383.60
   DDG Weekly Average Spot Price     $162.00
                      DDG Value Relative to:   4/5     3/29
                         116.46%     114.82%
                                Soybean Meal  42.23%    41.40%
                   Cost Per Unit of Protein:
                                         DDG   $6.00     $5.89
                                Soybean Meal   $8.08     $8.08
Notes:
Corn and soybean prices take from DTN Market Quotes. DDG price
represents the average spot price from Midwest companies
collected on Thursday afternoons. Soybean meal cost per unit
of protein is cost per ton divided by 47.5. DDG cost per unit
of protein is cost per ton divided by 27.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow her on Twitter @MaryCKenn

******************************************************************************
A Recap of Tariff Warnings

   I'm a little embarrassed to admit, but when Wednesday's news of China's 
proposed soybean tariff hit the wire, I was not at my post. I had taken my 
first day off in 2018 and didn't hear the news until after the markets were 
closed.

   Scrolling through office emails that afternoon, I got a brief sense of how 
hectic it was in the DTN newsroom early Wednesday. Editors, reporters and 
analysts were poring over various reports, checking facts and putting out 
information to our subscribers as fast as they responsibly could.

   A one-minute chart autopsy shows May soybeans broke lower at 2:43 a.m. CDT; 
down 38 cents within five minutes, down 44 cents in 14 minutes and then reached 
its low of the session, down 54 1/2 cents, an hour and 14 minutes later. Having 
been at this line of work since 1985, I am all too familiar with what days like 
this can do to even disciplined traders. Mike Tyson's famous quip comes to 
mind, "Everyone has a plan until they get punched in the mouth." 
(https://bit.ly/1hsv185)  

   As a DTN grain market analyst, however, I wasn't concerned so much about 
traders as I was for DTN subscribers and my own responsibility in the matter. 
Had I done my part to help warn our customers that days like this were part of 
the risk they were facing?

   The first time I wrote about a possible trade war with China was Dec. 27, 
2016, a little over a month after President Trump was elected. "Soybeans' 
Gathering Storm" (https://bit.ly/2iCcqMh) talked about President Donald Trump's 
campaign rhetoric, noted the people he was surrounding himself with and talked 
about how China might respond to the new president's tactics. 

   For U.S. grain producers, a possible halt of U.S. soybean imports by the 
world's largest soybean buyer was not a pleasant thought and we went through 
the math of what that might look like. Similar to 2018, we noted that China 
could avoid U.S. soybean purchases for a while, but would be vulnerable in the 
fall, when Brazil's exports typically wind down.

   As the Trump Administration took its time in preparing its plans, U.S. 
soybean trade flowed relatively unhindered in 2017. In August, however, the 
U.S. launched an investigation to determine whether Beijing improperly 
pressured foreign companies to hand over intellectual property rights. The 
concern has been that China twists the arms of foreign companies to get trade 
secrets that they then share with their own high-tech companies.

   The investigation struck a nerve with the Chinese government and remains the 
core issue underneath all the layers of proposed tariffs. In December, China 
fired back with a "request" for USDA to comply with, and pay for, stricter 
shipping standards for soybeans -- a demand that was not applied to either 
Brazil or Argentina. For some reason that still makes little sense, USDA 
complied and I wrote about this in "For U.S. Soybean Growers, Trade War Is 
Here" on Jan. 16, 2018. (https://bit.ly/2mFSfRe) 

   I was a bit surprised to encounter some flak for that article as readers 
were eager to point out China's overwhelming preference for Brazil's soybeans 
in early 2018 could be explained by differences in soybeans' protein levels and 
transportation costs. Both points were valid to an extent, but missed the 
larger picture of what was happening. They also could not explain why nations 
other than China increased their soybean purchases from the U.S. at a time when 
China had clearly pulled back. 

   "For Soybeans, Timing is Everything" (https://bit.ly/2GFlCMa) is the latest 
column on the topic, posted Mar. 27, shortly after China had responded to 
President Trump's steel and aluminum tariffs. China's list included U.S. pork, 
but not yet soybeans. The column also revisited the math on how far China could 
go on Brazil's soybeans and suggested October to January as the four-month 
window when U.S. soybeans would be needed.

   Fortunately for China, Brazil had good growing weather in 2018 and China 
could have extended its purchases a little longer had Argentina not gotten hit 
with drought. On Thursday afternoon, the Buenos Aires Grain Exchange estimated 
Argentina's soybean crop at 38.0 million metric tons (1.40 billion bushels) in 
early 2018, down from 57.8 mmt (2.12 bb) the previous year. USDA is likely to 
lower its own estimate of 47.0 mmt (1.73 bb) in Tuesday's World Agricultural 
Supply and Demand Estimates (WASDE) report.

   One market clue that I currently find difficult to explain (and may be a 
sign of China's current stress) is the difference in FOB soybean prices. As of 
Thursday, Brazil soybeans were at $11.30 a bushel, 37 cents above the 
equivalent price in New Orleans, even as Brazil is in the midst of a large 
harvest. 

   Put that together with a November 2018 soybean price that is 2 1/4 cents 
above the March 2019 contract and see commercials already willing to pay up for 
new-crop soybeans at roughly the same time China is expected to turn to the U.S.

   That initial column I wrote shortly after Christmas 2016 was early with its 
warning, but seemed to come to fruition on Wednesday afternoon:

   "I hate to say it, but it is possible that we will wake up one morning to 
read that China is no longer importing U.S. soybeans. Even if it is a temporary 
move, I shudder to think how prices might respond and producers should consider 
some kind of protective action now. We can't say we didn't see it coming."

   Todd Hultman can be reached at Todd.Hultman@dtn.com 

   Follow Todd Hultman on Twitter @ToddHultman1

******************************************************************************
Logistic Issues, Higher Corn Market Pushes DDG Higher

   OMAHA (DTN) -- Distillers dried grain (DDG) domestic prices continue the 
climb we witnessed through most of the winter. Much of that strength has come 
from the sharp rise in soymeal prices; while those prices have come off their 
recent highs, they are still giving DDG the edge as a better value per unit of 
protein. Thursday's higher DDG prices found support in by the surge in the corn 
market after USDA estimated 2018 corn plantings at 88.0 million acres, versus 
90.2 million a year ago, and less than market expectations.

   A DDG merchandiser told me product could get tight, especially in the 
eastern truck market as plant maintenance shutdown season starts soon. He also 
noted as temperatures increase and pastures start to green, we may see some 
seasonal downturn in prices, but so far deferred bids aren't reflecting that. 
He noted that, seasonally, as more cattle go to slaughter in the spring and 
summer, less feed will be consumed. For now, the late start to spring has 
slowed any chance of pastures greening soon, especially in the upper Midwest. 

   The average DDG spot price from the 39 locations DTN collected bids from was 
$159 for the week ended March 29, up $5 on average versus a week ago. Based on 
the average of bids collected by DTN, the value of DDG relative to corn for the 
week ended March 29 was at 114.82%, and the value of DDG relative to soybean 
meal was at 41.40%. The cost per unit of protein for DDG was $5.89, compared to 
the cost for soybean meal at $8.08. 

   MEXICO, GULF MARKETS STRONG

   Distillers dried grain with solubles (DDGS) prices delivered to the 
California market were stronger last week as more unit trains have been heading 
to Mexico. Export statistics released by the U.S. Census Bureau on March 7 
showed total U.S. exports of DDGS totaled 898,940 metric tons in January, down 
4% from a year ago. Mexico was the top export destination again in January, 
accounting for 20% of the total, proof that Mexico is an important U.S. 
customer.

   Barge CIF NOLA DDGS prices were $2/mt higher while FOB NOLA prices were 
$6/mt higher on average compared to last week, noted USGC in its weekly price 
report. A merchandiser told me DDGS at the Gulf are currently 130% the value of 
corn and the Gulf is short on product. He noted the uncertainty over how many 
loaded barges are actually either sitting at the Gulf or trying to work their 
way down there as river conditions in the Lower Mississippi River (LMR) to the 
Gulf remain a problem due to flooding. He said if this is the case, that could 
change the price picture, but it's not easy to determine yet.

   Regardless, the Gulf is a mess right now. Tom Russell, Russell Marine Group, 
told DTN on March 30, "The Baton Rouge and New Orleans Harbor continue to be 
backed up and congested due to high water. Logistics are stressed. Barge fleets 
are having difficult time delivering barges due to mandated safety measures. 
Once barges are in port, fleet delivery times to destination terminals can take 
additional four to six days. Safety protocols are likely to be in place well 
into May as rains occurring across the Midwest, northern areas of the South, 
and Ohio River Valley over the next 10 days will create another rise on rivers 
throughout the system."

   WILL CHINA RETALIATE AGAINST DDGS IMPORTS AGAIN?

   Last November, China's Ministry of Foreign Affairs announced on its website 
that it would again allow U.S. DDGS to be imported without charging an 11% 
value-added tax (VAT). At that time, U.S. Grains Council (USGC) President and 
CEO Tom Sleight told DTN that China's statement to remove its VAT on imports of 
U.S. DDGS "opens the door a little" for U.S. imports. "We are pleased to see 
this move, which we've been working toward for months," said Sleight. "This 
change will immediately improve the competitiveness of U.S. DDGS in what was 
once our top market, which is a very positive thing," said Sleight. He also 
noted this may be a step, albeit small, toward a possible negotiation over the 
stiff duties and tariffs U.S. DDGS exports to China still face. 

   Fast forward to March 22 when President Donald Trump signed an executive 
order creating close to $60 billion in new tariffs against China. The tariffs 
cover high-tech products made in China and are in place to restrict Chinese 
investment in the U.S., which will banish the likelihood of any negotiations on 
the DDGS duties and tariffs that Sleight mentioned above. 

   On March 22, U.S. Grains Council released a statement by Sleight in response 
to that announcement. "The farmers and exporters we represent have been here 
before in our relationship with China. Since 2010, we have been adversely 
impacted by trade policy actions by China against U.S. DDGS, sorghum, ethanol 
and corn. We have supported targeted, U.S. government efforts to address these 
issues but nevertheless remained dedicated to the China market because it holds 
immense growth potential for U.S. agriculture."

   With the return of Vietnam in November 2017 as a buyer of U.S. DDGS, exports 
did get a boost after Vietnam shut off U.S. DDGS in October 2016 over issues 
pertaining to fumigation. While Vietnam has been one of the largest customers 
of U.S. DDGS, the loss of China has had an impact on exports as well. 

   According to USGC, stiff penalties applied to both U.S. DDG or DDGS as of 
January 2017, caused U.S. exports to China to fall from 5.4 million metric tons 
in 2015 to 3.3 mmt in 2016 and just 739,000 mt as of November 2017. 

   "While we are not surprised, we are dismayed at new tariffs announced by the 
Trump administration against China, which will almost certainly prompt 
immediate and painful retaliation against U.S. agriculture and which have 
already complicated our global efforts to promote sales of U.S. grains and 
grain products," said Sleight.

   Mary Kennedy can be reached at mary.kennedy@dtn.com

   Follow Mary Kennedy on Twitter @MaryCKenn

******************************************************************************
Planting Intentions: Will Farmers Stick to Same Rotation as 2017?

   As the USDA National Agricultural Statistics Service (NASS) March 31 
Prospective Planting report nears, speculation abounds over what farmers intend 
to plant this spring. 

   The annual report is based on a survey the USDA conducts with farmers around 
the country as to what crops they intend to plant, and how many acres of each 
crop they will plant. In anticipation of the upcoming report, I reached out to 
farmers and elevator managers and asked them what their intentions are and what 
changes would be made compared to 2017 planting.

   An elevator manager in eastern North Dakota told me that spring wheat 
planting will be up 15%, soybeans beans will be up 10% and corn down 8%. Keith 
Brandt, general manager of Plains Grain and Agronomy, LLC, Enderlin, North 
Dakota, said he sees a similar pattern in his area.

   "There will be a 10% decrease in corn acres, a 3%-to-5% increase in soybeans 
and an 8%-to-10% increase in spring wheat," said Brandt. "I don't see much 
field work until later in April. If some of that wheat seeding goes into May, 
we will lose wheat acres and increase bean acres. Also, there will be more 
dicamba-resistant beans planted this year in order to avoid vapor drift issues. 

   "We will see more conventional (non-GMO) corn planted this year because of 
seed cost. The savings on seed cost is about $60-to-$70 per bag, which equates 
to about $20-to-$25 per acre. Farmers have to be careful, because additional 
chemical cost for corn borer or some other insect, plus chemical cost for weed 
control, could push that back up to the same or more as GMO seed. If they have 
insect issues and field loss of corn, they won't save anything," Brandt said.

   I asked Brandt what the reason was for the lower corn acres that I had been 
hearing about elsewhere and he said, "When corn harvest went until late 
November last year, many farmers thought that was too long and that is the main 
reason for cutting back, along with high input costs as well." 

   Jeff Kittell, merchandiser for Border Ag and Energy, Russell, North Dakota, 
pointed out that they are still experiencing snowstorms, "so it's hard to get 
real excited about spring work yet. With the moisture we are supposed to 
receive again over the weekend, we should be in good shape to get the crop 
started, as these last snowstorms have been rain and wet heavy snow.

   "Our spring wheat acres will be about the same as last year and we expect 
soybean acres will increase along with canola. Corn acres will be down, and I 
have heard of guys getting out of corn completely for the year. We will also 
see some increased acres in specialty crops due to good contracts and 
insurance. We could see more oats if the farmer can get a contract. Oats worked 
out well for guys who planted them last year and they are a low input crop," 
concluded Kittell.

   Tim Luken, manager Oahe Grain Farmers, Onida, South Dakota, told DTN that 
most of the farmers in his area are not going to change much as far as wheat 
acres go. "Spring wheat acres will be up a little due to more sunflowers that 
were planted after the winter wheat that failed in 2017 was sprayed out," said 
Luken. "I have heard talk of less corn acres being put in due to cost and a few 
more beans to replace corn acres. 

   "Conditions last fall were dry and wheat stubble was very short to catch any 
snow due to last summer's drought," added Luken. "We did pick up some nice snow 
the past three weeks, and this past week it has started to melt. Our topsoil 
moisture will be 'so so' to get things started this spring, but subsoil will be 
short, and more will be needed down the road. This part of the country is 
always 30 days from a drought." 

   Danny Pinske, manager Pro-Ag Farmers' Cooperative, Hoffman, Minnesota, told 
DTN that he was hearing some talk of more wheat, but it is so small of an 
acreage in his area, he said it's not a big deal. "The general talk is more 
soybeans," said Pinske. "I think if we have a good, fairly early spring, corn 
will not drop much in acres. Some farmers are thinking more corn now as the 
market moves higher. Maybe in the end, not much will change from last year 
other than slightly lower corn acres. The frost is still quite deep here, which 
could delay early planting. It seems some farmers are going to be flexible in 
what they plant leaving 10%-to-15% open for either corn or soybeans."

   Tim Dufault, who farms in Crookston, Minnesota, told DTN he will be planting 
more wheat and less soybeans than last year. "With average yields and current 
prices, wheat will project a $20 per acre profit and soybean projects a $19 per 
acre loss," said Dufault. "Corn acres look to be down in northwest Minnesota 
and northeast North Dakota this year. Average corn projections show a 
$60-to-$80 per acre loss. Too many growers feel it's just too big of a gamble 
to hope that corn can be profitable on their farms.

   "Right now spring planting looks like a long way off because all the fields 
are still covered with snow," added Dufault. "On top of that, there is snow and 
cool temperatures in the seven-day forecast. Our average first day of planting 
is April 20. We could still make that with above average temperatures and 
little precipitation. Soil moisture last fall was just on the dry side, but 
it's nothing that can't be fixed with a good April shower."

   I spoke to a few farmers from southern Minnesota recently at the Minnesota 
Grain and Feed Conference, and they told me they were sticking to their usual 
corn and soybean planting intentions. Of course, the recent snowfall over this 
past weekend will likely slow them down, along with the cool temperatures and 
more precipitation due in the next week, according to local weather reports. I 
also spoke to a famer in northern Illinois who told me that he intends to plant 
corn and soybeans again, similar to what he did last year.

   A farmer in northeast Iowa told me that he was staying with corn and beans. 
"We are following our rotation, so no acre changes based on commodity prices. 
No fieldwork for us yet; fertilizer is on from last fall and we are ready to 
plant. We intend on starting around April 15 to April 20 with corn but have to 
see what weather does and allows us to do. We would like to capture higher bean 
yields as a result of earlier planting date; we've added another planter so we 
can have corn and beans going at same time. We are pushing all agronomic and 
management factors we can to drive productivity (yield) to help offset stagnant 
commodity prices, and we are investing in products and inputs with a proven 
performance record or things we have tested and used ourselves."

   James Ramsey, who farms 3,500 acres of corn and soybeans in Shelbyville, 
Indiana, said, "We are planting our normal rotation of corn and soybeans. We 
increased wheat (winter) acres to 300 acres last fall and had planned on more 
but couldn't get it planted. We intend to start beans as soon as possible; 
hopefully March 30 or after, and we won't start corn until April 15 at the 
earliest. We may also try sunflowers again after wheat comes off, depending on 
weather."

   Angie Setzer, Vice President of Grain at Citizens LLC, Charlotte, Michigan, 
told DTN that planting intentions in Michigan definitely depends on the area. 
"We had folks in Central Michigan that were able to work with very solid winter 
wheat planting conditions and went in that direction with a touch more acres 
than the year prior. However, as you got further south we saw more rain and 
less than ideal conditions cutting into acres there. 

   "From an overall standpoint when it comes to spring plantings, most of my 
customers plan to keep relatively close to their rotations. What was corn last 
year will likely be beans this year. For every grower that has told me they 
intend to increase bean acres, I have another grower looking at planting more 
corn. In the end, I imagine we'll see acreage in the state stay relatively 
close to last year, with Mother Nature being the final determinant."

   As far as timing of planting, Setzer noted that temperatures in Michigan 
have been cool, but it has been relatively dry. "We have folks starting 
fertilizer application on their wheat, and as long as the weather pattern 
doesn't radically change, our agronomic team figures they'll be in the field 
starting spring prep work by the first week of April," said Setzer. "We'd love 
warmer temps of course, but we don't expect corn and beans planting to get 
rolling until the first part of May. From what I've heard, guys are starting to 
put sugar beets in in a few select locations."

   Todd LaPlant, elevator manager at EGT LLC, Kintyre Flats, Montana told DTN 
his area is expecting spring wheat acres to be up 15% over last year, with less 
pulse crops, canola and durum being seeded. "Spring wheat is competitive with 
pulse prices and a better price than durum for new-crop. We are three to four 
weeks out from planting due to how cold March has been; we still have about a 
foot of snow. We are slowly recovering from the drought last year, but the snow 
should melt and go right in the ground since it's still powder dry underneath."

   What about Durum and Pulse Acres in the U.S. and Canada?

   I spoke with a durum buyer in the U.S. and he told me he expects durum acres 
to be down 10%-to-15% in west central North Dakota along with fewer peas, 
because there is no decent new-crop bids for them. 

   "In northwest North Dakota, durum acres could be unchanged to maybe down 
5%-to-10%," he said. "If we lose acres there, it will likely go to spring 
wheat, but the loss in pea acres in that area will help us not go backwards as 
much on durum. In Montana, I feel these acres are up 10%-to-15% with less 
options on winter wheat planted and peas. Spring wheat will be up there as 
well."

   Cliff Jamieson, DTN Canadian Grains Analyst said that, "Early indications 
suggest that Canadian prairie producers will seed more acres to durum, despite 
a lack of favorable price signals. While official Statistics Canada acreage 
estimates based on producer surveys will be released on April 27, Agriculture 
and Agri-Food Canada (AAFC) has released early estimates that suggest producers 
will seed 5% more acres at close to 5.5 million acres, while some private 
estimates have suggested acres could increase even more." Jamieson noted that 
yields are forecast to recover from last year's drought-reduced levels. 

   "Spot prices for 1 CWAD 13% protein reported by pdqinfo.ca on Friday were 
reported at roughly $263/metric tons (mt) or $7.16/bushel (bu) across Southern 
Saskatchewan, while this same area shows new-crop September/October bids in the 
$6.70-to-$6.90/bu range," said Jamieson. "The International Grains Council 
reports asking prices for durum FOB the St. Lawrence at $285/mt USD as of March 
21, which has remained steady since January. Early new-crop indications from 
AAFC show the range of expected producer returns (Canadian dollars) for the 
2018-19 crop year falling by $10/mt from the current crop year to 
$245/mt-to-$275/mt ($6.67/bu to $7.48/bu).

   "One of the factors causing uncertainty in durum markets is the 
implementation of country of origin labeling requirements in Italy, a market 
that typically absorbs up to 25% of Canadian durum exports. Current estimates 
from AAFC suggest global production will increase by 500,000 mt in 2018-19, 
although the upcoming European harvests will be watched closely.

   "Perhaps one of the largest drivers behind higher acres on the prairies is a 
switch away from pulse crops on the prairies. The reason for that is the 
prospect of a record crop to be produced in India and a number of initiatives 
within that country to promote self-sufficiency, including steep import 
tariffs, which has sharply curbed Canada's export potential," concluded 
Jamieson."

   John Steinbeck's quote "The best-laid plans of mice and men often go awry," 
could very well come true this spring if the weather doesn't shape up; 
especially in the Upper Midwest. Many famers may see their planting intentions 
on hold until Mother Nature decides to play nice.

   Mary Kennedy can be reached at mary.kennedy@dtn.com 

   Follow Mary Kennedy on Twitter @MaryCKenn

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